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Types of mainland trade licence
Just like many places around the globe, entrepreneurs and companies must obtain a trade licence to validate their mainalnd company as a legal entity in the United Arab Emirates. This trade licence must be granted before commencing business activity. This applies in both free zone jurisdictions and Mainland Dubai. Having a trade licence in Duabi ascertains your customers that you are a legitimate business that complies with local laws and regulations.
Whilst there are many steps to get your business registered in the mainland, obtaining a trade licence in Dubai is the most crucial to business setup.
When starting a new business in the UAE, you need to acquire the right trade licence to ensure that your mainland company is set up properly for the long-term. The type of business activities, company structure and jurisdiction where you will operate can affect the type of trade licence you need to acquire and the requirements applicable to you.
Below are the three types of trade licences that you need to consider as you begin the company formation process and start a mainland business in Dubai:
Popular Mainland Activities
Professional trade licence
The UAE government requires businesses and entrepreneurs to obtain a professional business trade licence from the Department of Economic Development (DED) before they can be authorised to provide their professional services to clients from the Dubai mainland.
The purpose of professional licensing is to establish that the person or business is qualified to provide services in a certain profession. Issuance of these licences generally requires the applicant to show certain skills or training.
All professionals, specialists, craftsmen and artisans need to acquire a professional trade licence to set up a mainland company in Dubai.
When dealing with mainland company formation in Dubai, there are several company structures that can be formed with a professional licence: A Limited Liability Company where a local sponsor holds 51% of the company; and a Civil Company and a Sole Establishment where the foreign investor(s) have 100% ownership of their company.
However, in setting up a Civil Company or a Sole Establishment, a UAE national must be appointed as a local service agent (LSA) to complete the legal formalities.
Commercial trade licence
Mainland companies dealing with buying and selling of goods and commodities, or any kind of trade activities, require a commercial trade licence to operate in the UAE. This business licence can be used to form a limited liability company (LLC) or set up a sole establishment, and it can be used for both specialised trading and general trading activities in the UAE.
There are different types of commercial trade licences in the UAE. If you are navigating the process of company formation, you must apply for the correct type of commercial trade licence that will permit you to carry out trading activities specific to your business.
Broadcast and communications companies, rental transportation services, retail companies, construction companies, healthcare businesses, real estate businesses, and other general trading entities also need to apply for a commercial trade licence in Dubai.
Industrial trade licence
Businesses that want to conduct industrial or manufacturing-based activities in the UAE must acquire an industrial trade licence, which will allow them to engage in activities related to converting natural materials or incorporating natural resources into their end products.
This business licence is issued by the DED but additional approvals might be required from the Ministry of Finance, Ministry of Economy, the Ministry of Energy and Infrastructure and other authorities, depending on the industrial activity involved.
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